Magazine

Talk Show

October 26, 2003

"Of course I'm scared. The last place I would ever want to go is prison"

-Martha Stewart, in a taped interview with 20/20's Barbara Walters Is Hewlett-Packard experiencing a brain drain in its storage business? In the past 15 months, at least six executives have bolted. That has some analysts worrying about HP's prospects. When HP listed the benefits of acquiring Compaq two years ago, it promised to shine in storage. HP's market share has held. But its $3.6 billion in projected 2003 storage sales would be a 1% dip from last year, says Merrill Lynch.

HP's losses have been EMC's gains. Five HP execs have jumped to the rival. The latest: On Oct. 8, Compaq storage vet Howard Elias joined EMC to manage its emerging businesses. Elias ran storage for HP, but was in a broader management role recently. Another Compaq alum, Mark Lewis, joined EMC last year as chief technologist. And a handful of storage engineers joined rival Seagate Technology last year. "I'm concerned about the ripple effect a year or two from now," says analyst Tony Prigmore of Enterprise Storage Group.

HP says the moves are largely due to melding two management teams -- and the remaining team is seasoned. "They might not be as well-known, but they really get the job done," says Bob Schultz, HP's storage head. That's a must if HP is going to shine. It seems Manhattan landmarks can be had for less cash than you would think. The GM building sold for $1.4 billion last month, or $700 per square foot. That's about 46% more than other Midtown buildings. But the buyer, real estate tycoon Harry Macklowe, put up just $100 million of his own cash -- at most.

How did he do it? Deutsche Bank loaned $1.15 billion. Macklowe also used more than $200 million of a line of credit from Soros Credit LP, part of George Soros' empire. The deal is worth $1.45 billion once closing expenses are added, says Robert Horowitz, a financial adviser to Macklowe.

The bet is risky. Deutsche Bank is parceling out its loan, spreading its exposure. With Manhattan real estate soft, Macklowe will need rates to stay low and rents to climb. He foresees continued low rates and has a plan to increase the building's income, says a spokesman. Others are skeptical. Says Douglas Shorenstein, CEO of landlord Shorenstein Co.: "Either [Macklowe's] a genius or he loses the building." That's quite a wager. Nobel Laureate Dr. Harold Varmus is fed up with the high price of scientific journals. So Varmus, president of Memorial Sloan-Kettering Cancer Center, is leading a group that has started its own to compete with the likes of Nature, which can run $920 a year. The difference: As of Oct. 13, a Web version of Varmus' PLoS Biology (for Public Library of Science) is free. And a yearly subscription for a print version is just $150.

Two years ago, Varmus began pressuring the world's 28,000 scientific journals to make their content more accessible. "That just wasn't happening quickly enough," he says. So the group got a $9 million grant and asked authors to pay $1,500 for publishing costs. No paper will be rejected because of an author's inability to pay, Varmus says.

Publishers note that someone still has to pay. "There are costs," says Eric Swanson, head of scientific publishing at John Wiley & Sons. "It's never free." But it's getting closer. By yearend, Space Imaging and DigitalGlobe may win approval to operate commercial satellites with cameras that can discern objects as small as 9 inches square. That's a lot sharper than what's now in orbit -- anything under 24 inches square is too small to see. The new birds could go up in 2006. To help relieve the country's spy-sats, which have been hit by cost overruns and launch delays, the government has turned to private operators. The latest: On Sept. 30, DigitalGlobe won a $500 million deal from the Pentagon and Homeland Security Dept. Don't worry about terrorists using the birds. The feds will probably restrict access. Wendy's back. The fast-food chain's namesake has joined with her brother and three sisters to buy 15 Wendy's restaurants near Columbus, Ohio, where dad Dave Thomas opened his first hamburger joint in 1969.

Wendy Thomas has been a franchisee before, but she sold her five Dallas outlets in 1999. After her father died in 2002, she says, the children wanted to do something as a family. "We just felt this big hole in our heart. And we thought of Wendy's because it was dad." The terms of their Oct. 2 deal were not disclosed, but franchises typically sell for $500,000 or more, plus land.

Wendy -- the nickname she prefers to her real name, Melinda Lou -- says she really did look like the caricature when she was little: red hair in pigtails, freckles, buck teeth. That and her catchy moniker were why her father named the company after her. Today, she says she takes her four kids to Wendy's every day -- just like dad used to do. Teenagers are going to hate this, but now there's a service that lets you keep track of the family car after you've loaned your kids the keys. Installed under the dash, a gizmo called Networkcar uses the global positioning system to report the location of the vehicle every two minutes over a wireless network. To find out where the car is, you log on to a Web site to see the automobile pinpointed on a map -- with a street address.

Networkcar is sold by about 100 car dealers, and it's catching on fast. It costs $995, including the first year of service. After that, it's $9 a month. And it does more than keep tabs on your kids. Networkcar comes with roadside assistance -- up to four calls a year to fix a flat -- and a guarantee from manufacturer Reynolds and Reynolds that if your car is stolen, police will recover it within 24 hours. Unlike LoJack, which is used only for recovering stolen vehicles and isn't turned on until the police are notified, Networkcar is always on when the car is running. When it's parked, the Web page shows the last location reported, essentially where the car is parked.

Because the device plugs into the same diagnostic port that mechanics use to hook your car up to the shop computer, it also constantly monitors the car's performance. If, for example, the warning light on the dash goes on, it sends you (and your dealer) an e-mail saying what's wrong. It also will notify you when the oil needs to be changed. A bonus for Californians, thanks to a deal with that state: Networkcar automatically checks your emissions, so you can skip that pesky every-other-year smog check.